International Journal of Research in Finance and Management
2021, Vol. 4, Issue 2
Corporate social responsibility and agency cost: Evidence from the UK retail industry
Dr. Fakhrul Hasan
This dissertation aims to evaluate corporate social responsibility (CSR) impacts on the UK listed retailers' agency costs in 2016-2020 and is broken down into three main objectives – (1) describe the UK listed retailers' CSR performance level, (2) test impacts of CSR on agency costs of these firms, and (3) test the moderating role of industry for the CSR-agency costs relationship. By the application of the regressions with fixed effects and robust standard error type, this study has revealed that in this period, the UK listed retailers' CSR performance is at the moderate level on average. However, there is a large dispersion in CSR performance among retailers. CSR of the UK listed retailers significantly reduced their asset turnover (RTA), but it insignificantly affected selling and general administrative expenses (SGAE) ratio. This study finds no moderating effects of firm size for UK-listed retailers' CSR - agency costs relationship. Finally, this study offers several implications associated with CSR investment and corporate governance mechanisms to shareholders and management of the UK-listed retailers and academicians.